Oregon Pacific Bank Announces First Quarter Earnings Results

Florence, Ore., April 20, 2020 – Oregon Pacific Bancorp (ORPB) today reported financial results for the first quarter ended March 31, 2020.


  • First quarter net income of $642 thousand – $0.09 per diluted share
  • Quarterly deposit growth of $21.2 million
  • Quarterly loan growth of $2.32 million
  • Tax equivalent net interest margin of 4.39%

Review full earnings report, financial stateents, and quarterly highlights HERE >

Oregon Pacific Bancorp, and its wholly owned subsidiary Oregon Pacific Bank, reported quarterly net income of $642 thousand, or $0.09 per diluted share compared to $400 thousand, or $0.06 per diluted share for the quarter ended March 31, 2019. Quarterly earnings were impacted by an increase in provision for loan losses, totaling $378 thousand for the quarter. The increase in provision was in response to economic conditions attributable to COVID-19 and the Governor’s mandated closure of certain businesses.

“During March, Oregon Pacific’s Bankers proactively worked with borrowers to understand how their businesses were impacted by COVID-19,” said Ron Green President and CEO. “This hands-on approach resulted in several loan modifications, including short term interest only, or payment deferral periods based on each businesses’ cash flow needs. While the full economic impact of COVID-19 is not fully understood, Oregon Pacific Bank is committed to assisting our clients through these unprecedented times.”   

In the first quarter the Bank continued to experience growth in both loans and deposits. Period end deposits totaled $339.2 million, representing growth of $21.2 million over the prior quarter end. Average deposits for the quarter, a metric that removes the daily volatility in balances, totaled $325.1 million. The Bank experienced a large portion of the deposit growth following the stock market disruption in early March.  

Period end loans, net of deferred loan origination fees, totaled $301.2 million, representing growth of $2.3 million during the quarter. The Bank did experience some payoffs during the quarter, as a decrease in rates at the beginning of March prompted some borrowers to refinance with other financial institutions. During the month of March, the Bank experienced unscheduled prepayments totaling approximately $7.5 million. The Bank saw a reduction in payoff requests toward the end of March as economic uncertainty made the prospects of refinancing more difficult for some borrowers. 

Subsequent to the end of the quarter, the Small Business Administration (SBA) opened the Paycheck Protection Program (PPP), which enables eligible businesses and non-profit agencies to receive partially forgivable loans to support payroll expenses during the COVID-19 crisis. Through April 20, 2020, Oregon Pacific Bank worked with existing clients to have 470 PPP loans approved through the SBA, totaling $94.8 million.

“We are proud to see the work our bankers have undertaken to support our clients through the Paycheck Protection Program,” said John Raleigh, Executive Vice President and Chief Lending Officer. “Our bankers worked quickly to secure loans for our clients and demonstrate the responsiveness of a small community bank.”

For the quarter ended March 31, 2020, the Bank booked net charge offs of $5 thousand. During the first quarter the Bank saw a decrease in nonperforming assets which lowered to $1.3 million, down from $1.6 million at the end of the fourth quarter primarily related to the payoff of one loan relationship. The Bank also transferred one residential property into other real estate with a balance of $51 thousand during the quarter. The allowance for loan losses as a percentage of nonperforming loans grew to 322.44% amid the economic uncertainty of COVID-19.       

The first quarter 2020 net interest margin of 4.39% represented an increase of four basis points from the 4.35% earned during the fourth quarter 2019. During the quarter the bank received prepayment penalties totaling $141 thousand which contributed 16 basis points to the quarterly margin. Excluding the prepayment penalty, the first quarter net interest margin would have been 4.23%. The Bank also saw a decrease in the cost of interest-bearing liabilities which fell to 0.45% during the first quarter 2020, down from 0.54% in the fourth quarter 2019, as the Bank instituted reductions in deposit rates following the reduction in the Fed Funds rate in early March.      

During the first quarter 2020, noninterest income was $1.25 million, down slightly from the $1.26 million earned in the fourth quarter of 2019. During the quarter, the Bank’s wholly owned investment advisory subsidiary, Oregon Pacific Wealth Management, LLC, saw an increase in investment advisory fees, which were assessed based on assets under management of $65.5 million as of December 31, 2019. Assets under management fell to $58.0 million on March 31, 2020. This reduction was attributed to the significant market correction during the quarter and was partially offset by the addition of new clients since December 31, 2019. This overall reduction in assets under management will affect second quarter revenue as the investment advisory fees are assessed based on asset totals as of March 31, 2020.   

Noninterest expense in the fourth quarter totaled $3.8 million, up $181 thousand from the fourth quarter 2019. On a linked quarter basis, the Bank saw increases in salaries and employee benefits expense, primarily tied to the full quarter of salary and benefits expense associated with the new Medford branch operations staff, who were hired in early November 2019. The Bank also saw an increase in outside services due to the timing of the annual financial statement audit in February 2020 and the outsourcing of Trust Operations Function, which was implemented in November 2019 and resulted in additional monthly trust expense of $7 thousand per month. The Bank continued to incur loan and collection expense as one of the Bank’s problem assets, an agricultural property, is requiring ongoing assistance from a receiver to support maintenance of the property. The Bank is continuing to work through issues associated with the liquidation.

Forward-Looking Statement Safe Harbor

This release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (“PSLRA”). These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often use words such as “anticipates,” “targets,” “expects,” “estimates,” “intends,” “plans,” “goals,” “believes” and other similar expressions or future or conditional verbs such as “will,” “should,” “would” and “could.” The forward-looking statements made represent Oregon Pacific Bank’s current estimates, projections, expectations, plans or forecasts of its future results and revenues, including but not limited to statements about performance, loan or deposit growth, loan prepayments, strategic focus, capital position, liquidity, credit quality and credit quality trends. These statements are not guarantees of future results or performance and involve certain risks, uncertainties and assumptions that are difficult to predict and are often beyond Oregon Pacific Bank’s control. Actual outcomes and results may differ materially from those expressed in, or implied by, any of these forward-looking statements. You should not place undue reliance on any forward-looking statement and should consider all of the following uncertainties and risks.  Oregon Pacific Bancorp undertakes no obligation to publicly revise or update any forward-looking statement to reflect the impact of events or circumstances that arise after the date of this release. This statement is included for the express purpose of invoking the PSLRA’s safe harbor provisions.Oregon Pacific Bank Highlights

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